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Embattled former CEO SBF recently stated that John Ray’s testimony on FTX and its operational affairs is false.
According to former FTX CEO Sam Bankman-Fried (SBF), his successor’s testimony regarding the operational affairs of the sunken crypto exchange is false. The Bahamas-based ex-CEO claimed that several legally-admissible statements from John J Ray III’s camp were incorrect. However, Bankman-Fried added that he remains unsure if the falsehood is an honest mistake or deliberate malicious misinformation.
Bankman-Fried also claimed that John J Ray III and his team have snubbed him since they took over. According to the embattled former CEO, “John Ray and his team do not communicate with me. They have not responded and he has not responded to a single message I’ve sent him. His team does not in general work with me or, you know, care about what I have to say.”
SBF also suggested that the new CEO’s plan would be better executed by talking to people involved in the company before he took over. He said:
“I think it’s pretty hard, if you try and take over a company and refuse to talk with anyone who was involved in running that company, to, in a short period of time, know where any of the relevant data would be.”
John J Ray III’s Lambasts FTX Management & Operations
Further elaborating on his claim that Ray refuses to consult with the former FTX management over record-keeping, Bankman-Fried disputed Ray’s allegations of zero financial controls. His rebuff directly addressed a question regarding his successor’s review of FTX’s financial controls. In an earlier disposition, Ray said the bankrupt exchange’s corporate controls were the worst in his 40-year career. In addition, the attorney and insolvency professional, who also oversaw Enron’s bankruptcy, described FTX’s management as “inexperienced, unsophisticated and potentially compromised individuals.”
According to Ray, the defunct crypto exchange did not have appropriate records, books, or security controls for its digital assets. He also revealed in court filings that FTX lacked a proper staff structure and payroll system. Ray’s scathing assessment of FTX’s management and operations also extended to its sister firm, Alameda Research. The insolvency specialist alleged that the hedge fund and related businesses did not keep complete records of their investments. Furthermore, he advised the court to refrain from relying on audited financial statements, which he suggested are questionable.
SBF Rebuttal to New FTX CEO ‘False Testimony’ Is Another Attempt to Remove Himself from Bankruptcy Mess
SBF’s sharp response to what he believes is false testimony is the most recent media outing for the embattled founder. Bankman-Fried has been highly vocal on social media and in several interviews since his once-lauded crypto exchange collapsed. Meanwhile, according to some legal experts, the former crypto-wunderkind might soon face criminal charges as he continues to tell his side of the story.
As SBF suggested, a focal point of FTX’s collapse is its relationship with Alameda Research. The former billionaire alleged that the crypto exchange’s downfall began when Alameda took on overleveraged collateral and got liquidated. The effect created a substantial deficit in FTX’s balance sheet, which set the company back. SBF also claimed that FTX harbored a stub account from when it could not secure bank accounts which amounted to a massive obscure debt position.